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Bitcoin yesterday had a rapid decline from $ 39,000 to $ 36,400. Altcoins also fell, but the rate of decline was much lower than BTC.
This drop started in the stock market and then affected BTC. US stocks fell sharply in all three indexes, with the biggest drop still being Nasdaq, which fell more than 4.99%. This is the lowest close since November 2020 for both the Dow Jones and Nasdaq. Both of those declines were the worst intraday declines since 2020. Stock futures also fell slightly. Gold fell to 1872 USD/ounce. And oil rose slightly to 108 USD/barrel.
The economy in the second quarter is not expected to be good
Cloud and e-commerce stocks were among the biggest losers over the past day, due to a lower-than-expected earnings report combined with the Fed’s announcement of a rate hike. Big Tech was also affected by the decline in shares of Amazon and Meta. Wayfair reported a larger-than-expected loss in the first quarter as shoppers cut their spending on that type of home. The company’s report showed that the number of active customers in the first quarter of 2022 fell 23.4% from a year ago, causing the share price to drop more than 25% in yesterday’s trading.
However, there are still some companies with positive quarterly reports. DoorDash stock rose 10% in extended trading after the company reported 35% revenue growth in the first quarter. This shows that the company’s core business of food delivery can still grow even after the pandemic hits.
In addition, the Bureau of Labor Statistics reports that worker productivity fell starting in 2022 at the fastest rate in nearly 75 years while labor costs skyrocketed due to the impact of covid. Worker productivity fell 7.5% in the first quarter, the fastest decline since 1947.
At the same time, labor costs relative to productivity rose 11.6%, bringing the increase over the past four quarters to 7.2%, the fastest increase in about 40 years. The weekly jobless number rose to 200,000, much higher than Wall Street estimates. Although the unemployment report is low and the Fed only cares about this, the economic situation is not clear. Lower labor productivity causes production output to decrease, leading to a downturn in the economy. This is a sign that Q2 business results will not be good.
European countries are also experiencing high inflation. However, much affected by the war, many countries are still hesitant to raise interest rates. Some countries also started to move to raise interest rates. Prices rose 7% in the UK in March from a year earlier, the fastest pace since 1992. The central bank predicts inflation will peak above 10% in the final quarter of the year. So, the Bank of England decided to raise interest rates from 0.75% to 1%, the highest level since 2009.
Some other big economies like Japan don’t want to raise interest rates yet. Or China does not increase but also reduces interest rates to stimulate the economy despite high inflation. As a result, despite high inflation in the US, the DXY index of the dollar continued to increase.
Along with raising interest rates, the Fed will sell a large amount of public bonds and bonds. Usually banks will buy these bonds to earn interest, reducing a part of the budget that can be loaned. From there, reduce the amount of money pushed in and slow down the economy.
After one day, the Fed announced an interest rate increase and investors also saw more clearly the current state of the economy. So they sold more stocks, which led to a sharp drop in the US stock market. Falling stocks also affect the crypto market.
Looking back at the BTC market over the years, although the price fluctuates greatly, the bottom bottom is getting higher and higher than the previous one. Previous large price movements will gradually become small points on the price chart.
When the price drops, it is an opportunity for investors to buy crypto at a lower price. The winters from 2018 are a very good time to accumulate so that when the market grows, investors can get big profits. The larger the market, the lower the price volatility of BTC becomes. For long-term investment, we need to ensure other sources of income to have capital average price and trust the market to average steadily.
Some other information:
Elon Musk is expected to serve as interim CEO of Twitter for several months after completing his takeover of the $44 billion social media company. An SEC filing shows that Elon Musk received an additional $7 billion from friends and investors to buy Twitter such as Lawrence Ellison, the company Binance, Fidelity, and more.
Terra continues to buy 37,863 BTC, equivalent to 1.5 billion USD in Bitcoin to increase the reserve for stablecoin UST. According to the report, LFG purchased $500 million from Three Arrows Capital, a crypto hedge fund. Another $1 billion came from OTC swaps.
Tron’s Justin Sun has also announced that his network’s stablecoin will follow the same path as Terra. Justin Sun revealed that Tron will back its decentralized USD (USDD) with $10 billion in Bitcoin and other cryptocurrencies.
The Cardano network is preparing for the upcoming Hard Fork Combinator (HFC) event “Vasil”. This update, scheduled for June, aims to make Cardano more efficient when it comes to processing decentralized application (dApps) transactions. As a result, smart contract users on the network will benefit from a better experience.
The launch date of the Salvador Bitcoin bond for the construction of the Salvadoran Bitcoin City that has been announced continues to be delayed. The reason for the delay is due to the impact of the current war in Ukraine and the deceleration of the global market. According to Finance Minister Alejandro Zelaya, El Salvador is still waiting for more favorable market conditions.
Senators Elizabeth Warren of Massachusetts and Tina Smith of Minnesota expressed concern about Fidelity’s decision to add BTC to a 401(k) investment plan. To better understand Fidelity’s decision, the senators asked the company to provide answers on how it is planning to address the risks posed by the DOL by May 18, 2022. They also request more information about Bitcoin investment fees and the amount generated from Fidelity cryptocurrency mining.
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